Strong Aussie Continues to Destroy Economy

24 Jan 12

Whilst the strong Australian dollar is attractive for mining export profits, it is destroying our manufacturing base and therefore jobs.

Toyota's announcement of the axing of at least 350 jobs is a direct result of the strong dollar, making the export of the Camry and Aurion models to the Middle East less attractive. A Toyota spokesman has indicated that in the face of lower production, the size of the workforce could not be sustained.

At face value the number of 350 jobs does not sound huge (other than to those affected), but for every one of these Toyota employees there is the equivalent of nine further jobs at risk, at component manufacturers who supply Toyota with parts. Although early speculation, there could be a total of near to 3,500 jobs at risk as a result of Toyota's move.

Despite Federal and State Government support for Toyota over recent years, this has been insufficient to support the company in the face of a 36 per cent drop in production as both domestic demand, and demand from the Middle East where the Australia built Camry has proven to be a success story, has declined due to price increases to offset the effects of the strong Australian dollar.

The strong Australian dollar has also been responsible for other high profile job cuts in recent times and it would appear that manufacturing exports are doomed without Government intervention to protect the Manufacturing sector.

You don't have to look back too far in history to see the commencement of the demise of the manufacturing sector. Manufacturing in this country was thriving, and employed well over a million people, then the Howard Government began to lower import tariffs that had protected the sector a move which was continued by successive Governments.

In the face of the strong dollar, no tariff protection against imports, and an indifference towards manufacturing by governments, the sector faces an uphill battle and more jobs are likely to be shed. Victoria will be the hardest hit, given that Victoria remains Australia's largest manufacturing based economy.